The other side of the equation: Consumer acceptance of value

As more organizations see the need to shift strategies and embrace value-based care, they’re wondering how to get patients to embrace managed care options.

This article is part of the July 2023 COVERstory.

Acceptance of value-based care by consumers remains a challenging piece of the equation in efforts to widen the use of the reimbursement approach. 

Consumers – particularly those of Medicare age – have been a bit skittish about opting for Medicare Advantage plans, which are offered by private companies following rules set by Medicare. Typically, the offer combined Part A and Part B coverage as well as drug coverage and possibly other health benefits, such as dental and vision coverage. 

Winning consumer support for Medicare Advantage and other value-based methodologies is crucial in the goal espoused by the Centers for Medicare & Medicaid Services to have 100 percent of original Medicare beneficiaries and the majority of Medicaid in accountable care coverage by 2030. 

Data from the Health Care Payment Learning and Action Network show slightly less than 60 percent of payments from 63 commercial plans, five state Medicaid programs and Medicare had some linkage to value in 2021, with the rest coming from fee-for-service reimbursement. This percentage has remained roughly the same since 2018. At present, value-based care arrangements cover a wide range of arrangements, with the most advanced offering per-member per-month reimbursement for full-risk coverage. 

Slow growth 

Recent research that focuses on participation in Medicare Advantage plans indicates that there’s been slow but recently accelerating growth in beneficiaries’ acceptance of the managed care options vis a vis fee for service. 

MA enrollment reached 48 percent of Medicare beneficiaries in 2022, compared with only 17 percent of beneficiaries in 2000, says the report, based on a research collaboration between the Department of Health Care Policy at Harvard Medical School and Innovalon, a provider of cloud-based software supporting data aggregation and analysis. 

The partners’ first take on research into MA and fee-for-service identifies differences in beneficiaries that select them, based on Innovalon’s MORE Registry, which the organizations contend is “the nation’s largest dataset originating from longitudinally matched, primary source data.”

Findings include:

  • • MA enrollees are twice a likely to be non-white, and much more likely to be Black, Hispanic or Asian.
  • • MA enrollees are over 50% more likely than those in traditional Medicare to have been enrolled in an HMO plan immediately before turning 65. 
  • • Substantial differences exist in health-relevant socioeconomic characteristics of MA and traditional Medicare enrollees. The average income of a traditional Medicare enrollee is $85,085, compared with $76,720 for an MA enrollee. Researchers contend that this gap arises from the relative lack of MA enrollees in the most affluent segments.

More analysis of the data is planned, but even these early efforts can provide crucial insight for policymakers, health plans and those trying to understand how best to improve consumer willingness to accept value-based healthcare approaches. 

“The early findings from this first-of-its-kind research give an important view into the pre-65 demographic, clinical and social risk characteristics of the rapidly growing Medicare population,” affirms Michael Chernew, health economist and professor at Harvard Medical School. “The findings provide new resources for policymakers and healthcare administrators to improve the delivery of value-based care programs, address health inequities and improve health outcomes for all beneficiaries.” 

“Historically, it has been challenging to document differences in beneficiaries who enroll in Medicare Advantage vs. traditional Medicare at age 65,” adds Christie Teigland, vice president of research science and advanced analytics at Inovalon. “Our study provides a better understanding of the core customer segments of Medicare Advantage and which beneficiaries are most likely to enroll in which coverage type. This information can help health plans better tailor and target their products to enhance member recruitment and retention and better plan for future resource needs.” 

Consumer perceptions 

Organizations promoting the use of value-based care are finding resistance from demographics that associate the plans with restricting consumer choice in selecting providers, executives say.  

That’s not always accurate, and place a heavy burden on consumers to understand their healthcare choices, navigate the system and manage their own care, says Michelle Ilitch, vice president of network solutions and value based programs at Priority Health, a Grand Rapids, Mich.-based health plan. 

“We’re trying to figure out how to motivate people to see the advantage in Medicare Advantage,” she asserts. “A lot of patients think they will get better care by having more choices, instead of researching what is better from managed care. There are benefits from being aligned to a group of doctors. With fee for service, then you have to go out on your own, make choices, do your own research and select a pharmacy benefit manager. With Medicare Advantage, you don’t have to do that, but it’s a difficult transition for some patients to make.” 

Getting serious 

It’s not enough to have a “build it and they will come” philosophy, some say – patients need to realize the benefits of having a data-driven proactive partner concerned about their health. 

“We can’t wait for patients to come to us; we’re looking to how we can proactively build that relationship,” says Jonathon Welch, chief medical officer for population initiatives for Geisinger Health. Empowering clinicians to work as a team helps assure patients they’ll get coordinated, thoughtful care. With value-based care, “there’s a belief (at Geisinger) that there is a solution in the universe for a patient; there’s a persistence there and an appropriate optimism that something that doesn’t work is not a stopping point,” he adds. “Too often, if something doesn't work in traditional fee for service, there’s a closing of the book on that patient.” 

From the provider perspective, organizations need to fully commit to value-based care tenets, change strategic approaches and not appear tepid about it as only an alternative to traditional fee for service, says Bradley Hunter, vice president of value-based care and core solutions for KLAS. 

“Value-based care is a fundamental change in the business model,” he says. “It’s painful to do, because there are so many moving parts – how do we make ourselves to be that (kind of) health system. There’s a lot of dabbling in value-based care right now. If you’re dabbling, you’re not moving, you’re not really going to take it seriously.”

Return to the July 2023 COVERstory.

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